AIA Group Ltd, the third-largest Asia-based insurer by market capitalization, said its value of new business expanded 53 percent in the third quarter, led by higher sales in Malaysia and China.

The gauge of projected future profitability of new policies rose to $245 million, from $160 million a year earlier, the Hong Kong-based insurer said in a statement to the Hong Kong Stock Exchange on Friday. The consensus estimate by analysts was for a 30 percent increase, according to a Goldman Sachs Group Inc report dated October 10.

AIA, under the leadership of Chief Executive Officer Mark Tucker since July 2010, has been focusing on lifting new policy sales and agent productivity to secure long-term growth. The insurer is recovering from troubles at its largest shareholder American International Group Inc since 2008 and uncertainties during the attempted takeover by Prudential Plc last year.

Value of new business measures the projected future after-tax profit of new policies sold in the period minus the costs of holding capital in addition to regulatory reserves to support the business.

Barclays Plc analysts Mark Kellock and Thomas Wang estimated a 25 percent increase in AIA's third-quarter value of new business to $200 million in a report dated October 7. Goldman Sachs's Mancy Sun and Philippa Rogers estimated a 46 percent jump in the October 10 report.

The third quarter brought AIA's new business value growth to 39 percent in the nine months to August 31, accelerating from the 32 percent jump in the first six months.

Annualized new premiums, a gauge of new business sales, jumped 52 percent to $766 million in the third quarter, AIA said.

The nine-month figure rose to $1.86 billion, 34 percent more than the year before.

New business margin, or value of new business as a percentage of annualized new premiums, widened by 4.5 percentage points to 36 percent in the third quarter as its product mix improved and it sold more policies attached to main insurance, it said.

AIA has one of the largest pools of existing policies among regional insurers. Yet it had generated new business at half the rate of China Life Insurance Co, Asia's largest insurer, in terms of the ratio of new business to in-force policies, Credit Suisse Group AG analyst Arjan van Veen wrote in a September 14 report.

AIA booked a 14 percent increase in total weighted premium income, an indicator of long-term business volume, as it includes renewal premiums, to $3.75 billion. Nine-month total weighted premium income rose 13 percent to $10.5 billion.

AIA's Hong Kong shares advanced 12 percent this year, against the 24 percent decline of the Hang Seng Finance Index tracking 12 banks and insurance companies listed in Hong Kong.

Bloomberg

(HK Edition 10/15/2011 page2)